Sat parents down to discuss college plans

ucbalumnus
Wed, 28 Apr 2021 23:55:34 +0000

MMRose:

Can you elaborate on it being a tax break?

Money kept in 529 plans is not subject to yearly federal income taxes on dividends, interest, and realized capital gains, similar to IRA, 401k, 403b type of accounts. This can be a significant tax advantage if the money is invested for many years in investments that produce significant dividends, interest, and/or realized capital gains that would be subject to yearly federal income taxes.